Mountain Views News          Saturday, January 21, 2012

10

LEFT TURN/RIGHT TURN

 Mountain Views News Saturday, January 21, 2012 

GREG Welborn

HOWARD Hays As I See It 

BAIN CAPITAL AND AMERICA’S 
GREATNESS

So, I write this article as a conservative, 
and right now Mitt Romney is the assumed 
standard bearer of our cause. But I’m not 
necessarily a fan of Romney. It’s not that I 
oppose him, it’s just that I’m disappointed 
in Romney’s apparent inability to explain, 
justify and elevate the role that companies, 
such as Bain Capital, plaid in the success 
of the U.S. in the last quarter of the 20th 
century.

Ironically, today is the day that Mitt Romney 
released details about his tax return, 
confirming that he is a very successful 
capitalist, and it is the day that Kodak put itself 
into bankruptcy, disgorging thousands more 
on to unemployment. A once great company 
has fallen to unimagined lows. Kodak is the 
company whose engineers developed and 
pioneered digital photography. Kodak is 
also the company that couldn’t capitalize on 
that discovery because of poor management. 
The irony is that Kodak, and its employees, 
would be in a much better place if they had 
attracted the attention of Bain Capital, or 
some other private equity or venture capital 
firm.

Such piracy (that’s what the raiders of 
venture capital and private equity firms are 
often called) would have forced complacent, 
out-of-touch, slow-to-react management to 
change their ways. That is the wonderful 
role and legacy played by the Bain Capitals 
of the world. By forcing management to 
improve or be fired, they save companies 
and industries from themselves and allow 
their successors to thrive.

An honest review of our country’s economic 
history in the 1970s would tell us that the 
success in the decade that followed was 
not a foregone conclusion. Our economy 
was suffering, and many a good company 
was teetering on the edge of bankruptcy, 
extinction or irrelevance. We could easily 
have taken the path that would have led us to 
what Europe has become today: a has-been. 
Europe used to house the preeminent powers 
of the world for several centuries. But sadly, 
its great companies became complacent 
and lethargic. Management in these once-
great companies became complacent and 
arrogant. European governments abetted 
this sclerosis by protecting companies and 
whole industries from competition. Without 
the 
threat of 
competition and the 
mandate to thrive in 
order to survive, slow 
deterioration gave way 
to abject failure. 

America in the 1980s 
could easily have 
travelled the same 
path. Fortunately, our sense of economic 
freedom prevented government from 
simply stepping in to protect our economic 
dinosaurs. Instead, companies managed by 

tired or arrogant executives were allowed to 
fall prey to venture capitalists and private 
equity firms. The titles sound somehow 
menacing, but venture capital and private 
equity are simply names given to groups of 
people who believe they can buy struggling 
companies (thus putting their money at risk) 
and turn them around. In this, they were 
largely successful.

Did people lose jobs as a result? Absolutely. 
Management teams and unproductive 
workers who didn’t contribute as much as 
they consumed in salaries were let go. In 
their place the Bain Capitals of the world put 
better management and more motivated and 
harder working employees. Some companies 
nonetheless failed. But many more rose 
from their putative death beds, grew to 
several times their former size, and added to 
the employment roles more than could ever 
have been afforded in their previous anemic 
states.

America owes a great debt to the Bain Capitals 
of the world. Their willingness to risk their 
money to buy, turn around and nurture 
companies back from the brink resulted in 
greater, not less, employment in the long 
term and a renewed economic strength that 
has been the envy of the world. We can only 
hope that Mitt Romney, if he is to be our 
standard bearer, can rise to the occasion and 
actually articulate the great benefit his work 
at Bain provided this country. 

Gregory J. Welborn is an independent opinion 
columnist. He writes and speaks frequently on 
political, economic and social issues. His columns 
have appeared in publications such as The Los 
Angeles Daily News, The Orange County Register, 
The Wall Street Journal and USA Today. He can be 
reached at gwelborn@mvobserver.com.


“Some animals were meant 
to carry each other to 
live symbiotically over a 
lifetime. Star crossed lovers, 
monogamous swans. We are 
not swans. We are sharks.”- 

George Clooney, “Up In The 
Air”

In this film from a couple 
years ago, Clooney played a 
character that flew around 
the country on assignment to inform targeted 
employees of client companies their services 
were no longer needed. Clients gladly availed 
themselves of the services offered by Clooney’s 
firm, avoiding the necessity of undertaking the 
unpleasant task themselves.

In an opening montage, a succession of individuals 
sit across the table from Clooney as he collects 
keys and company I.D.s, telling them to gather 
personal belongings and vacate the premises. 
For this sequence, director Jason Reitman cast 
non-professionals who had themselves been 
recently laid off, so their reactions to being hit 
with a wrenching life-change were informed by 
real-life experience.

Last week, Greg Welborn explained that when 
Mitt Romney said he enjoyed firing people, 
he didn’t mean firing people, but because his 
company Bain Capital fired people, it’s all for 
the good. I find it difficult to imagine Romney 
himself firing somebody up-close and personal, 
rather than having someone else do it for him, as 
in the movie “Up In The Air”.

At a Hollywood job, I had frequent phone 
dealings with a career employee at the news 
division of a major TV network. It was acquired 
by a new corporate parent that chose to cut 
back an unprofitable division, and saw salaried 
employees as expendable when interns would 
work for free. Soon after, when I received another 
call from this fellow with whom I’d never before 
exchanged personal information, in a voice of 
desperation he told me of being in his late 50’s, 
making mortgage and car payments, supporting 
two kids in college, and not knowing what he was 
going to do now.

At another job, I reported to a man who’d spend 
the day going over spreadsheets in his office, and 
then send me out to take care of things when 
he felt a personnel change might improve the 
figures. I remember in particular collecting the 
keys from a fairly new employee, who just the 
day before had proudly showed me the picture of 
two young kids he placed on the ledge above his 
workstation.

These incidents happened many years ago, but 
the memory hasn’t dimmed. Firing is a subject 
much easier to deal with in the abstract; it’s hard 
to make flippant analogies when considering 
the effects on real people, real families, and real 
communities.

One way to desensitize the subject is to mask 
true objectives and dehumanize the objects. It’s 
easier to talk about pampered big-government 
bureaucrats than about teachers, firefighters 
and social workers – neighbors, working 
mothers, heads of families and customers of 
local merchants – whom we’re told to resent for 
earning the salary and benefits we once expected 
for ourselves. It’s easier to argue for smaller 
government than rationalize contracting-out, 
where government treasuries fund private profit 
rather than public service, and thousands of 
former public employees join the competition 
for scarce jobs.

It’s easier to describe a company like Bain 
Capital, as Greg does, as one that turns struggling 
companies into “viable and growing enterprises”, 
than confront the reality of a process consisting 
of taking control, borrowing against or selling 
off assets, then pocketing the proceeds while 
leaving a byproduct of shuttered factories, jobless 
workers and decimated retirement funds. An 
example can be found at the center of today’s 
campaigning, at Georgetown Steel in South 
Carolina.

Under Romney’s leadership, Bain bought the 
parent company in 1993 for $24.5 million, and 
a few years later had returned $58.4 million to 
investors – with $900,000 in annual “management 
fees” for themselves. As for the steel company, 
it was left bankrupt - $553.9 million in debts 
against $395.2 in assets. 

The head of the steelworkers’ union explained, 
“We were doing well and then Bain Capital bought 
us and they took everything they could out of the 
company without making the investments we 
needed to stay competitive.” 1,750 workers were 
cut by Bain managers – who continued to collect 
hefty bonuses from the firm while driving it into 
bankruptcy.

According to the L.A. Times, four of the ten 
highest-priced companies acquired by Bain 
under Mitt Romney went bankrupt within a 
few years. In three of those four, Bain and its 
investors made millions, while thousands were 
made jobless. As reported in the Times, Bain 
made money for investors “by firing workers, 
seeking government subsidies, and flipping 
companies quickly for large profits.”

Some have suggested government should be run 
like a business. We tried that – it’s called “The 
Previous Administration”. Republicans ran the 
government as Romney ran Bain Capital: assets, 
in this case “the full faith and credit of the United 
States”, were leveraged to the maximum to 
finance trillions in expenditures (two wars and a 
massive Medicare giveaway to drug companies), 
and most significantly, a big payout to investors. 
A massive tax cut was awarded those whose 
investments bought a controlling interest in the 
United States Congress.

And, like at Bain, those wealthy investors walked 
away with billions more while the rest of us, and 
the subsequent administration, were left to pay 
the bills and clean up the mess left behind.

We can expect more of the same under a 
Romney administration. According to the Tax 
Policy Center, his proposed plan would result 
in a tax hike for the majority of families with 
children with incomes under $50,000 a year. 
Those making over $1 million a year would get 
additional tax cuts of nearly $150,000. Half the 
benefits of his plan would go to those million-
and-above earners, paid for by adding over $6.5 
trillion to the deficit over the next decade.

We’ve seen that movie before. And in this case, 
we don’t need a sequel.

MIKE Antonovich


GOVERNOR NEEDS A NEW HORSE –

NOT A NEW SADDLE FOR A DEAD HORSE

LOS ANGELES 
COUNTY – Governor 
Brown, who has 
proposed a 7% increase 
in his FY 2012-13 
budget, is once again 
asking voters for more 
tax increases when the 
state’s economy remains 
stalled by already high taxes and slow growth.

“Threatening voters with draconian cuts in 
public safety and education if they don’t approve 
his tax increases is a typical scare tactic used 
by bully politicians who have failed to initiate 
reforms and improve government efficiency,” 
said Supervisor Michael D. Antonovich.

“The Governor fails to recognize that when you 
have a dead horse, you need a new horse -- not a 
new saddle,” he added. “The Governor needs to 
tackle civil service reform and initiate structural 
reforms, not continue business as usual. Abuses in 
the antiquated civil service system are currently 
paying two prison doctors, Dr. Jeffery Rohfling 
and Dr. Radu Mischuu, who were responsible for 
inmate deaths, over half a million dollars a year 
just to sort mail and review files in storage. This 
is an outrage.”

A sample of the vital structural reforms needed 
include:

· Consolidating Franchise Tax 
Board and the Board of Equalization to save 
$100 million annually;

· Consolidating Medi-Cal, Calworks and Food 
Stamps to save $4 billion, including $1.5 billion in 
state general funds over five years;

· Biennial renewal of driver’s licenses to save 
$1.2 million;

· Cut the bloated California State University 
system bureaucracy which now has more 
administrators than full-time faculty. Between 
1975 and 2008, the number of faculty members 
rose by 3% to 12,019 while the number of 
administrators rose 221% to 12,183;

· Implement a 2-year budget;

· Adopt a part-time legislature; and

· Repeal term limits.

Independent’s Eye by

JOE Gandelman

WHAT WE’VE LEARNED 
IN THE PRESIDENTIAL 
CAMPAIGN SO FAR 


HOBBS, N.M. -- 
You learn something 
new every day. In 
driving around the 
country, I’ve learned 
that oil companies 
reserve large numbers 
of motel rooms in 
this city and others so 
oil rig workers have 
places to stay. In some 
cities it’s almost impossible to get a hotel room. 
You have to carefully plan in advance.

That’s also the story of the months leading up 
to the 2012 presidential election: we’re learning 
something new every day. Here’s a partial list of 
what we’ve learned so far:

Ignore media hype about candidates who’ll 
enter the race and obliterate all competition. 
Texas Governor Rick Perry would supposedly 
enter the race, zoom in the polls and prevent 
former Massachusetts’ Gov. Mitt Romney from 
getting the Republican nomination. Perry turned 
out to be as smart as a Texas pinto bean and will 
be forever remembered as “Mr. Oops!” The press 
suggested former Utah Gov. Jon Houseman’s was 
a shoo-in and that Team Obama feared him but 
Huntsman should have stayed Ambassador to 
China. Considered by GOPers a traitor for having 
served in the Obama administration, Huntsman 
was patrician and mistakenly assumed that that 
being reasonable and thoughtful were virtues 
in today’s Republican Party. He was the perfect 
Republican Presidential candidate -- for the 
1980s. No bomb Iran produces could EVER be as 
big as these two.

Perry and Huntsman joined history’s ranks 
of Presidential wannabe failures overhyped by 
the media: Republican John Connally (1980), 
Democrat Edmund Muskie (1972), Republican 
Fred Thompson (2008), and Republican Rudy 
Giuliani (2008). Talking heads and scribes 
predicted all these guys would bust the town 
wide open but they couldn’t bust a city block.

Plentiful debates are a double-edged sword. The 
many Republican debates were criticized by some 
as hurting the GOP brand. But debates influenced 
candidates’ poll numbers. Former House Speaker 
Newt Gingrich got a second political lease on life 
due to solid debate performances. The shockingly 
ill-prepared Perry deflated due to them. The well-
prepared Romney is slowly making his “sale” to 
the general electorate partially due to them: a 
Gallup poll now has Romney up 23 points over 
his closest competitor.

PAC money always works – well, almost. 
Romney destroyed Gingrich in Iowa with PAC-
funded ads. But Gingrich’s PAC funded ads going 
after Romney for his Bain Capital days sparked 
Republican backlash.

A politician can get a second chance rebrand 
but he can ruin his rebrand. Gingrich convinced 
many Republicans there was a “new” older, wiser, 
not-as-much-a bomb-thrower Gingrich. Then he 
destroyed his rebranding by going after Romney 
with the Bain Capital issue and other verbal 
attacks. His polls tumbled. 

The Republicans could have problems winning 
the center, independent voters and Hispanic 
voters. On Monday, some in the debate audience 
booed when it was noted that Romney’s father was 
born in Mexico. At a debate in September some 
booed when a soldier noted he was gay. A week 
before that Tea Party audience members cheered 
when Ron Paul talked about someone dying 
uninsured. Meanwhile, the word “moderate” is 
used as a contemptuous, defining adjective while 
candidates such as Romney insisted they were 
never moderate. Democrats will have fun with 
video clips of these moments in defining today’s 
increasingly smaller tent GOP.

Political team Obama is a B team. Forget 
comparing them to the ace political teams that 
helped elect FDR, JFK, Ronald Reagan, Bill 
Clinton and the two George Bushes. They defend 
and react more than define and control. 

Hillary Clinton’s 2008 presidential campaign 
had a huge impact. In her excellent, must-read 
book “The Hillary Effect,” Washington pundit 
Taylor Marsh notes that Clinton’s 2008 campaign 
had ripple effects: Sarah Palin’s becoming 
Republican John McCain’s running mate, Palin 
then embracing the Tea Party and helping it 
oust some GOPers in 2010 to put its own people 
in Congress, Tea Party influence in Congress 
and Michele Bachmann seeking the Republican 
nomination. To many Americans, given the 
misogynistic ordeal Clinton endured during her 
2008 campaign and how she later resurfaced as 
a superb Secretary of State, Hillary Clinton is 
not a bittersweet case of “could have been” – but 
“should have been.”

Joe Gandelman is a veteran journalist who 
wrote for newspapers overseas and in the United 
States. He has appeared on cable news show 
political panels and is Editor-in-Chief of The 
Moderate Voice, an Internet hub for independents, 

PETER Funt


At the End of Our Rope? 

A few hours with the 
TV and radio the other 
night – one lowlight 
being a commercial 
for a holster 
guaranteed to prevent 
getting “pinched” by 
your concealed gun 
– underscored what a 
troubled and divided nation we have become. 

Fox News Channel carried the latest debate 
among GOP presidential candidates, during 
which Mitt Romney pledged never to support 
any laws whatsoever that limit gun sales in any 
way. Moving on to foreign policy, Romney said 
of our enemies, “We go anywhere and kill them.” 
Period. 

In an incoherent rant, Rick Perry said Turkey 
should be kicked out of NATO, adding that its 
respected prime minister, Recep Erdognan, might 
be an Islamic terrorist. 

Newt Gingrich doubled down on his earlier 
piece of oddball thinking that 13-year-olds 
should work as janitors in schools. He added that 
as many as 30 such teen employees could be hired 
for the cost of a single professional janitor in New 
York City. 

For a moment, Rick Santorum seemed like 
a flaming liberal when he said that felons, even 
those who had committed violent crimes, should 
be given the right to vote after they “have paid 
their debt to society.” Mitt Romney jumped in 
to make clear that he would never support such 
a thing. 

Ron Paul, lovable gent that he is at these affairs, 
said the proper income tax rate for Americans is 
“zero.” 

After two hours of this, plus an hour with 
Sean Hannity in the Spin Room – where the 
remarks were even more likely to cause dizziness 
– I turned on the radio. The host was Alex Jones, 
whose syndicated talk program is heard on 
over 60 stations, with commentary that Rolling 
Stone magazine said makes Rush Limbaugh and 
Glenn Beck “sound like tea-sipping NPR hosts on 
Zoloft.”

On this night Jones and his guest were 
discussing which countries would be the best 
places to flee to if politics and social programs 
made living in the U.S. intolerable. After detailed 
analysis of everything from tax rates to the 
behavior of dictators, they concluded that Canada 
and Australia were the best bets. 

But the most disturbing element of Jones’s 
program turned out to be the commercials. 
During a single break, there were four 30-second 
spots, each thoroughly frightening. 

The first was for food rations – the type you 
could store in your basement and survive on in 
the event of, well, just about any bad thing that 
would send you down to the basement for months 
at a time. 

The next commercial was for a type of pill 
that combats the effects of nuclear fallout. An 
announcer cited the accident at a nuclear plant in 
Japan as good reason for Americans to buy one 
hundred of these pills but indicated they were 
also handy should we be thrust into, well, just 
about any sort of nuclear nightmare. 

Then there was the ad for the holster – the 
one that made carrying a concealed gun more 
comfortable without any nasty pinching – since, 
well, we’ll all apparently be needing such weapons 
pretty soon. 

Finally, there was a most unusual ad for rope. 
The announcer sang the praises of 500 feet of very 
strong rope, without actually indicating what you 
might use it for. 

I told a conservative friend about the strange 
rope commercial. He said flatly, “If people 
become angry enough, there’s no telling what’s 
next, even lynchings.” 

Go figure. I thought the ad meant: If watching 
the five current GOP candidates becomes 
intolerable, and if fleeing to Australia doesn’t 
seem viable, you might find 500 feet of rope 
handy to, well, hang yourself.

Peter Funt is a writer and speaker and can be 
reached at www.candidcamera.com. 

©2012 Peter Funt. Columns distributed 
exclusively by: Cagle Cartoons, Inc., newspaper 
syndicate. For more info contact Cari Dawson 
Bartley. Email Cari@cagle.com, (800) 696-7561

This column has been edited by the author. 
Representations of fact and opinions are solely 
those of the author.

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